Matador Resources Company · NYSE:MTDR
Matador Resources — Raymond James Institutional Investors Conference 2023
57 slides from Matador Resources's conference presentation, Mar 6, 2023
Slide 1: Raymond James Institutional Investors Conference
Raymond James Institutional Investors Conference March 6, 2023
Slide 2: Investor Relations Contact and Disclosure Statements
Investor Relations Contact and Disclosure Statements Safe Harbor Statement – This presentation and statements made by representatives of Matador Investor Relations Contact Resources Company (“Matador” or the “Company”) during the course of this presentation include “forward- looking statements” with
Slide 3: 40 Years of Generating Shareholder Value
40 YEARS OF GENERATING SHAREHOLDER VALUE 1983 2003 Today “Matador I” “Matador II” Initial Capital: $270,000 Initial Capital: $6 million Sale Price: $388 million Current Market Cap: $6.9 billion(1) Note: Rate of return is based on dividend reinvestment and Enterprise Value. 3 (1) Closing share price
Slide 4: Matador Resources Company Overview
Matador Resources Company Overview Market Snapshot NYSE Symbol MTDR Market Capitalization(1) $6.9 billion Avg. Daily Production – Q4 2022 111.7 MBOE/d DELAWARE BASIN HAYNESVILLE/ Net Debt / LTM Adj. EBITDA(2)(3) – Q4 2022 ~0.1x 129,400 net acres COTTON VALLEY Adj. Free Cash Flow(2) – Q4 2022 $262.6
Slide 5: Matador Resources Company Overview
Matador Resources Company Overview TWIN LAKES DELAWARE BASIN HAYNESVILLE/ 129,400 net acres COTTON VALLEY 17,300 net acres ARROWHEAD RANGER MATADOR HEADQUARTERS DALLAS, TEXAS EAGLE FORD 13,100 net acres RUSTLER BREAKS ANTELOPE RIDGE STATELINE WOLF / JACKSON TRUST (LOVING) Matador Acreage at December
Slide 6: Record Operational and Financial Performance in 2022
Record Operational and Financial Performance in 2022 Record Annual Production 105,500 BOE per day: Beat Guidance!(1) Record 2022 Financial Results Oil and natural gas revenues ($2.9 billion), net income ($1.2 billion), Adjusted EBITDA(2) ($2.1 billion), Adjusted FCF(3) ($1.2 billion) Stron
Slide 7: 2022 Priorities and Milestones
2022 Priorities and Milestones – Free Cash Flow, Operational Excellence and Shareholder Returns 2022 Priorities Deliver Free Cash Flow Pay Down Debt Significant 2022 Milestones - Timeline Maintain or Increase Dividend 1 11 Voni (Stateline) wells to sales • Grew production to >100,000 BOE/d O
Slide 8: Borrowings Outstanding – Quarterly Results
Borrowings Outstanding – Quarterly Results Over Half of Borrowings Repaid Since Q3 2020 ($ in millions) Revolver Borrowings Revolver Borrowings Revolver Borrowings Senior Notes 6 $1,600 Senior Notes 6.0x 6.0x $1,525 (2) $1,490 Senior Notes (Bond Debt) Leverage $1,390 Leverage $1,400 $1,290 5.0x $475
Slide 9: Matador's Strategic Bolt-On Acquisition of Advance Energy
Matador’s Strategic Bolt-On Acquisition of Advance Energy ACQUISITION DETAILS Advance Transaction Overview Strategic bolt-on in the core of the Northern Delaware Basin Price: $1.6 billion(1) 18,500 net acres 99% Held-by-Production Effective Date: 1/1/2023 Attractive purchase price of 3.2
Slide 10: San Mateo – Differentiating Midstream Assets
San Mate and – Differentiating Midstream Assets Continue to Add Value to Matador(1) Matador Advance Ranger Stebbins Gathering Assets ~500 miles of three-stream pipelines(1) (oil, natural gas and water) Rustler Breaks Processing Capacity 520 MMcf per day(2) Wolf Salt Water Disposal 460,000 Bbl per da
Slide 11: Matador's 2023 Production Profile
Matador’s 2023 Production Profile Profitable Growth at a Measured Pace ~143,000 BOE/d in Q4 2023 +28% YoY 18% 124,110 120,000 22% 105,465 100,000 14% 86,176 80,000 75,175 59% Oil 60,000 57% Oil 57% 40,000 58% Oil Oil 20,000 0 (1) 2020 2021 2022 2023E Note: Estimates are pro forma for the expected cl
Slide 12: Unmatched Oil Production Growth
Unmatched Oil Production Growth Approaching 150,000 BOE/d! 143,000 Total (MBOE/d) 111,735 334.0 Natural Gas (MMcf/d) 296.5 87,500 Oil (Bbl/d) 62,316 Q4 22 Q2 23E Q4 23E (1) As of and as provided on February 21, 2023. Estimates are pro forma for the expected closing of the Advance acquisition in Q2 2
Slide 13: Significant 2023 Milestones – Timeline
Significant 2023 Milestones – Timeline 1 8 Rodney Robinson wells turning to sales in 1H 2023 2 Close the Advance acquisition in 1H 2023 3 8 Stateline wells turning to sales in 1H 2023 4 21 wells turning to sales on Advance properties in 2H 2023 5 18 Stebbins wells turning to sales in 2H 2023 6
Slide 14: Asset and Operations Overview
Asset and Operations Overview March 6, 2023
Slide 15: Delivering Strong Well Results All Around the Delaware Basin
Delivering Strong Well Results All Around the Delaware Basin! TWIN LAKES Matador Acreage (129,400 net) ~47,000 gross / ~25,800 net acres Advance Acreage (18,500 net) Pro Forma Acreage: (147,900 net) CURRENT DELAWARE BASIN ACTIVITY ARROWHEAD ~59,500 gross / ~22,500 net acres RANGER(1) Stateline: Dr
Slide 16: Record Setting MAXCOM Results – Celebrating 5 Years
Record Setting MAXCOM Results – Celebrating 5 Years 203 Matador Drilling Records and $30 Million Estimated Savings To Date Delaware Drilling Records Spud to Total Depth: 9.5 days Spud to Total Depth – 2 Mile Lateral: 9.7 Days Spud to Total Depth – 2.4 Mile Lateral: 15.7 Days Longest Well: 24
Slide 17: YE 2022 Total Proved Reserves
YE 2022 Total Proved Reserves as of December 31, 2022 YE SEC Commodity Price: $90.15/Bbl and $6.36/MMBtu Total Proved Reserves: 356.7 Million BOE Standardized Measure: $7.0 Billion PV-10(1): $9.1 Billion EF Oil PD Hay/CV Gas PUD Del 97% 62% Delaware 55% Oil Developed By Basin Reserves Mix % Develope
Slide 18: Combined MTDR + AEP: +30% Pro Forma Reserves Increase
Combined MTDR + AEP: +30% Pro Forma Reserves Increase(1) Total Proved Reserves: 463.1 million BOE (59% oil) pro forma at 12/31/2022 356.7 million BOE 55% Oil Standardized Measure = $6.98 PV-10(2) = $9.13 billion 356.7 Million BOE (Total Proved Reserves) +106.4 Million BOE (Total Proved Reserves) 106
Slide 19: Delaware Basin Extended Lateral Well Location Inventory
Delaware Basin Extended Lateral Well Location Inventory • Matador has identified up to 4,382 gross (1,468 net) remaining potential locations(1) for future drilling on its Delaware Basin acreage − Location counts assume extended lateral lengths whenever viable, and the total locations have an average
Slide 20: Midstream Operations
Midstream Operations March 6, 2023
Slide 21: Midstream Business Continues to Grow: San Mateo's Three-Pipe Offering
Midstream Business Continues to Grow: San Mateo’s “Three-Pipe” Offering Gas Gathering & Water Gathering & Oil Gathering & Processing Disposal Transportation 460 MMcf/d of designed natural gas 15 salt water disposal wells (SWDs) and Eddy County, NM and Loving County, cryogenic processing capaci
Slide 22: San Mateo Assets and Operations – Three-Pipe Offering
San Mateo(1) Assets and Operations – “Three-Pipe” Offering Eddy County, NM Assets Loving County, TX Assets 1 Mile Greater Stebbins Area Wolf Loving ~43 miles Reeves Loving Ward 1 Mile Rustler Breaks Eddy Lea Natural Gas Gathering and Processing 460 MMcf/d of designed natural gas cryogenic processi
Slide 23: Pronto Assets and Operations
Pronto Assets and Operations Strategically Expanding Lea County Footprint Advance Transaction Midstream Assets and Opportunities Acquiring ~35 mi of in-field gas and water gathering pipelines Acquiring an active Devonian Salt Water Disposal well with strong proven injection capacity Potential
Slide 24: San Mateo – Differentiating Midstream Asset
San Mateo – Differentiating Midstream Asset Matador owns 51% of San Mateo(1) $250 Water Oil Natural Gas $198 San Mateo's Adjusted EBITDA(2) $200 $185 $185 $165 $154 ($ in millions) $150 Natural Gas $113 $96 $100 Oil $62 $50 Water $31 $12 $4 $0 (5) 2015 2016 2017 2018 2019 2020 2021 Original October
Slide 25: ESG Stewardship
ESG Stewardship March 6, 2023
Slide 26: Committed to Environmental, Social and Governance (ESG) Stewardship
Committed to Environmental, Social and Governance (ESG) Stewardship Matador is committed to increasing the long-term value of its shares in a responsible manner. Matador’s aim has always been to reliably and profitably provide the energy that society needs in a manner that is safe, protects the envi
Slide 27: Committed to ESG Stewardship
Committed to Environmental, Social and Governance (ESG)(1) Stewardship ENVIRONMENTAL Increased transportation on pipeline Continued reduction of Increased use of non-fresh water, per-barrel emissions(2) including recycled water 28% 48% 96% 72% reduction in Gross reduction in of total water consumed
Slide 28: 2023 Operating Plan and Market Guidance
2023 Operating Plan and Market Guidance March 6, 2023
Slide 29: Summary and 2023 Guidance
Summary and 2023 Guidance (as Provided on February 21, 2023) (Pro Forma for Advance Acq. Closing in Q2 2023) Actual %YoY Guidance Metric 2023 Guidance Range 2022 Results Change(1) Total Oil Production 21.9 million Bbl 26.4 to 27.3 million Bbl + 22% Total Natural Gas Production 99.3 Bcf 107.7 to 113.
Slide 30: Matador's 2023 Delaware Basin Operated Drilling Program
Matador’s 2023 Delaware Basin Operated Drilling Program TWIN LAKES ~47,000 gross / ~25,800 net acres ARROWHEAD ~59,500 gross / ~22,500 net acres RANGER ~40,700 gross / ~22,600 net acres 18 2023E Wells Turned to Sales 21 Gross Net Operated 118 92.7 ADVANCE 21 Non-Operated 89 4.8 RODNEY ROBINSON RUSTL
Slide 31: 2023 Total Production Forecast by Quarter
2023 Total Production Forecast by Quarter(1) 40% Oil Production Growth Q4 2022 to Q4 2023 Natural Gas, MMcf/d 2023E Quarterly Production Cadence Oil, Bbl/d Rodney shut-ins occurred 17 Rodney wells shut-in Advance acquisition Minimal impact from 21 Production impact of new later than anticipated, pul
Slide 32: 40 Years of Generating Shareholder Value
40 YEARS OF GENERATING SHAREHOLDER VALUE 1983 2003 Today “Matador I” “Matador II” Initial Capital: $270,000 Initial Capital: $6 million Sale Price: $388 million Current Market Cap: $6.9 billion(1) Note: Rate of return is based on dividend reinvestment and Enterprise Value. 32 (1) Closing share price
Slide 33: Appendix
aN, ¢ Matador | RESOURCES COMPANY tia Appendix MIDR NYSE
Slide 34: Q4 and Year-End 2022 Selected Operating and Financial Results
Q4 and Year-End 2022 Selected Operating and Financial Results Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, 2022 2022 2021 2022 2021 Net Production Volumes:(1) Oil (MBbl) 5,733 5,535 4,578 21,943 17,840 Natural gas (Bcf) 27.3 24.9 20.7 99.3 81.7 Tota
Slide 35: Matador Resources and San Mateo Credit Facilities
Increased by $35 million Increased by 13% in Reduced to $0 in December 2022! November 2022! in April 2022! Matador Resources and San Mateo Credit Facilities Matador Credit Agreement Summary Bank group led by Royal Bank of Canada Last Elected Borrowings Letters of Credit Financial Covenant: Facility
Slide 36: Simple Balance Sheet – No Near-Term Debt Maturities
Simple Balance Sheet – No Near-Term Debt Maturities NO REVOLVER BORROWINGS REPURCHASED BONDS Repaid $475 million since Q3 2020 ~$351 million in 2022 YE 2022 LEVERAGE RATIO REPAID 54% OF Q3 2020 BALANCE REDUCED TO 0.1x(1) $826 million since Q3 2020) Lowest since IPO (Q1 2012) Debt Maturities ($ in mi
Slide 37: Hedging Profile – Remainder of 2023
Hedging Profile – Remainder of 2023(1) Waha-Henry Hub Basis Swaps Natural Gas Collars ~10% hedged for Q1 2023 5,000 5.0 4,550 4,600 4,600 4,500 4.5 Natural Gas Volume Hedged (Bcf) 4,000 4.0 Gas Volume Hedged (MMBtu) 3,500 3.5 2,950 3.0 3,000 Swap at 2.5 2.4 2,500 Swap Swap Swap $0.95 at at at -$1.85
Slide 38: An Integrated E&P and Midstream Strategy: Progress in All Areas
An Integrated E&P and Midstream Strategy: Progress in All Areas Average Daily Total Production Average Daily Total Delaware Basin Production (BOE/d) (BOE/d) Q4 2022 BOE up 6% sequentially; Q4 2022 BOE up 6% sequentially; 140,000 up 28% YoY up 29% YoY 140,000 Oil Natural Gas 120,000 110,750 111,735 1
Slide 39: Record San Mateo Midstream Results in 2022
Record San Mateo Midstream Results in 2022 (San Mateo is 51% Owned by Matador) San Mateo Average Water Handling San Mateo Average Natural Gas Gathering (MBbl/d) (MMcf/d) Q4 2022 up 8% sequentially; Record Quarter! Q4 2022 up 7% sequentially; Record Quarter! 400 up 23% YoY 386 400 up 21% YoY 348 358
Slide 40: Matador's Proved Reserves: 356.7 Million BOE at December 31, 2022
Matador’s Proved Reserves: 356.7 Million BOE at December 31, 2022 Haynesville/CV Haynesville/CV Haynesville/CV 3.5 MMBOE, 1% 5.7 MMBOE, 2% 6.1 MMBOE, 2% Delaware Delaware Delaware 312.0 MMBOE, 97% 346.8 MMBOE, 97% 261.9 MMBOE, 97% Eagle Ford Eagle Ford Eagle Ford 4.9 MMBOE, 2% 5.7 MMBOE, 2% 3.8 MMBO
Slide 41: 2022 Capital Investment Plan Summary
2022 Capital Investment Plan Summary $817 million – At Low End of Guidance Range(1) Full Year 2022 CapEx(2)(3) – $817 million 2022 Wells Turned to Sales Guidance Range(1) Actual Gross Net Below Drilling, Completing, Equipping $765 to $835 million $773 million midpoint Operated 81 64.5 +0.2 net Opera
Slide 42: Horizontal Wells Completed and Turned to Sales – Q4 2022
Horizontal Wells Completed and Turned to Sales – Q4 2022 During the fourth quarter of 2022, Matador turned to sales a total of 29 gross (15.9 net) horizontal wells across its various operating areas. This total was comprised of 24 gross (15.4 net) operated wells and 5 gross (0.5 net) non-operated
Slide 43: Horizontal Wells Completed and Turned to Sales – Full Year 2022
Horizontal Wells Completed and Turned to Sales – Full Year 2022 During full year 2022, Matador completed and turned to sales 155 gross (70.8 net) wells, including 81 gross (64.5 net) operated wells and 74 gross (6.4 net) non-operated wells ‒ Average lateral length for operated wells turned to sale
Slide 44: Wells Turned to Sales – 2023 Guidance
Wells Turned to Sales – 2023 Guidance(1) During full year 2023, Matador expects to turn to sales 207 gross (97.5 net) wells. Matador expects the Delaware Basin to account for 191 gross (97.3 net) wells, including 118 gross (92.7 net) operated and 73 gross (4.6 net) non-operated wells In 2023, Ma
Slide 45: 2023E Quarterly Turned-in-line Cadence
2023E Quarterly Turned-in-line (“TIL”) Cadence(1) (Pro Forma for Advance Acq. Closing in Q2 2023) Operated Non-Operated Total Asset Areas 2023 Gross Net Gross Net Gross Net Gross Operated Wells Q1 2023 17 14.9 37 1.3 54 16.2 8 Rodney Robinson, 6 Antelope Ridge, 3 Rustler Breaks Q2 2023 32 24.6 21 1.
Slide 46: 2023 Capital Investment Plan Summary
2023 Capital Investment Plan Summary(1) (Pro Forma for Advance Acq. Closing in Q2 2023) Full Year 2023E CapEx(2) – $1.425 billion – Midpoint (Delaware: Incorporating 8th operated rig at close of Advance transaction) 2023E Wells Turned to Sales Actual % YoY 2022 Results 2023 Guidance Change(3) Gross
Slide 47: 2023 Oil and Natural Gas Production Estimates
2023 Oil and Natural Gas Production Estimates(1) Total Oil and Natural Gas Production 2023E Oil Production – 22% Growth YoY 2023E CapEx(1)(2) (Midpoint): Natural Gas, Bcf D/C/E: $1,250 MM 18% • Estimated oil production of 26.4 to 27.3 million barrels Oil, MBbl Midstream(3): $175 MM 45,300 Total: $1,
Slide 48: 2023E Operating Cost Estimates
2023E Operating Cost Estimates (Unit Costs per BOE)(1) (Pro Forma for Closing Advance Acq. In Q2 2023) 2021 2022 Q4 2022 2023E 1 Production taxes, transportation and processing (“PTTP”) $5.69 $7.33 $6.10 $6.00 to $6.50 2 Lease operating (“LOE”) $3.46 $4.08 $3.98 $5.25 to $5.75 3 Plant and other mids
Slide 49: Q1 2023 Commodity Price Differentials
Q1 2023 Commodity Price Differentials Q4 2022 Q1 2023E Actual Actual Differential Realized Commodity Prices Benchmark(1) Realized Price Differential Guidance(2) Oil Prices, per Bbl $82.60 $83.90 +$1.30 ($1.50) to ($0.50) Natural Gas Prices, per Mcf $6.08 $5.65 ($0.43) $0.00 to +$1.00 The reduction
Slide 50: Adjusted EBITDA & Adjusted Free Cash Flow Reconciliations
Adjusted EBITDA & Adjusted Free Cash Flow Reconciliations Adjusted EBITDA Reconciliation – This presentation includes the non-GAAP financial measure of Adjusted EBITDA. Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s consoli
Slide 51: Adjusted EBITDA Reconciliation – Matador Resources Company
Adjusted EBITDA Reconciliation – Matador Resources Company The following table presents the calculation of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by operating activities, respectively. (In thousands) 3Q 2013
Slide 52: Adjusted EBITDA Reconciliation – Matador Resources Company, Consolidated
Adjusted EBITDA Reconciliation Matador Resources Company, Consolidated The following table presents our calculation of Adjusted EBITDA and reconciliation of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by operating activities, respectively. (In thousands)
Slide 53: Adjusted EBITDA Reconciliation – San Mateo (100%)
Adjusted EBITDA Reconciliation – San Mateo(1) (100%) The following table presents the calculation of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to the GAAP financial measures of net income and net cash provided by (used in) operating activities, respectively, for San Mateo Midstream,
Slide 54: Adjusted EBITDA Reconciliation San Mateo
Adjusted EBITDA Reconciliation San Mateo(1) The following table presents the calculation of Adjusted EBITDA and reconciliation of Adjusted EBITDA to the GAAP financial measures of net income and net cash provided by (used in) operating activities, respectively, for San Mateo Midstream, LLC. Year End
Slide 55: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation Matador Resources Company The following table presents the calculation of adjusted free cash flow and the reconciliation of adjusted free cash flow to the GAAP financial measure of net cash provided by operating activities. Three Months Ended Year Ended (In tho
Slide 56: Adjusted Net Income and Adjusted Earnings Per Diluted Common Share
Adjusted Net Income and Adjusted Earnings Per Diluted Common Share This presentation includes the non-GAAP financial measures of adjusted net income and adjusted earnings per diluted common share. These non-GAAP items are measured as net income attributable to Matador Resources Company shareholders,
Slide 57: PV-10 Reconciliation
PV-10 Reconciliation PV-10 is a non-GAAP financial measure and generally differs from Standardized Measure, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes on future net revenues. PV-10 is not an estimate of the fair market value of the Co
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